CardWeb is reporting that bankruptcy filings in January were below 100,000 for the first time in over four years.

That’s still a lot of filings (1.3 million a year if you figure in that January is traditionally a month of low filings). Bankruptcies are a lagging indicator, meaning that they usually don’t fall a lot until after an economic recovery is well under way, which all but the most partisan observers acknowledge is the case. I would think there’s a reasonable chance that the number might fall more in the coming months. I would also contend that most of the bankruptcies that remain will be medical in nature, which as I have noted before is often beyond the control of many.

So…..maybe the problem isn’t as great and the financial industry claims. And I still say they should have to agree to limits on their rates and fees before they massively change a system that for all its acknowledged flaws is not chronically broken.

No one can dispute that The Identity Theft Assistance Center (ITAC), intended to be a one-stop service for those who have been vicitimized by ID theft, is a good idea:

The Identity Theft Assistance Center (ITAC) is a one-year pilot intended to test a cooperative industry process for helping victims of identity theft by streamlining the recovery process…..Fifty (Financial Services Roundtable) Members are participating and funding the ITAC pilot as a commitment to their customers and to maintain trust in the nation’s financial services system. The financial services industry recognizes that identity theft is a crime of enormous human and economic consequences.

From reading ITAC’s FAQ Page, if an account associated with the ID theft happens to be with any of the participating institutions, frontline people from that institution are supposed to put them in touch with ITAC, which after a screening process determines what help is needed. Then ITAC is supposed to help with all of the credit bureau fraud alerts, police reports, and myriad other notifications and documents that are necessary to protect the victim. It appears that if you get help from ITAC, the assistance and hassle reduction are indeed very valuable.

Sounds good. Anyone who has ever been through an identity theft would immediately recognize the advantages of having ITAC as the “single point of contact” and “only (having) to tell their story once” (quotes are from ITAC).

The only trouble is that the frontline or branch people I spoke to at four of the participating financial institutions had NO idea what ITAC is until I told them, and therefore would be of no help to an ID theft victim unless the victim knew about ITAC already, AND insisted on being referred to them.

Three voice messages in the past two days to ITAC have gone unreturned (in fairness, call #1 was yesterday morning). I am e-mailing them a reference to this blogpost to ensure they have an opportunity to respond to my concerns about their lack of visibility, and will update this post if/when they do. (DONE: see UPDATE 2 below)

I’m concluding that, with rare exception, the only identity theft victims who will ever know about ITAC are the few people who might stumble onto ITAC’s web site, people who read this post, or people who tell others about this post.

So…now that YOU know, please tell others about ITAC, and DEMAND to be referred to ITAC if you are a victim and have an account at one of the institutions participating in the pilot project (the list is HERE).

UPDATE:
On a humorous note, Wizbang suggests a “legally interesting” response to ID theft that I personally would not recommend.

UPDATE 2:
An ITAC person called back on Wednesday afternoon, and acknowledged that many frontline people at institutions participating in the pilot may very well not be aware of ITAC. She thought my recommendation that affected consumers should insist on help was a good one. She relayed to me that people who are referred to ITAC are very satisfied with the help they are getting, and I have no reason to doubt that. I should also note that once a bank’s Security department is aware of the ID theft, it is possible that the Security people may be aware of ITAC and complete the referral process. That is impossible to determine, but again the fact that readers of this blog now know of ITAC gives them a better chance of getting to ITAC’s services.

The problem has existed for some time (the Snopes Urban Legend reference is from December 2003), but I believe the suggested reaction to it is inadequate.

The question is: What should you do if you get a call from someone claiming to be with Visa or MasterCard Security who asks you for the three-digit security code on the back of your card?

Here’s how it works: The person claiming to be from Security asks you if you made a purchase from a named merchant (e.g., “an anti-telemarketing device from ABC Company in Colorado”), and when you tell them you didn’t, they say they will credit your account and start a fraud investigation.

Now that they have you at ease, they ask you to look at the back of your card and give them the three-digit security code on it “for verification purposes.”

Snopes’ suggested response is:

…..always verify the identities of the people with whom you speak. If you have security questions or concerns about your credit card, call the financial institution who issued your card directly. If someone contacts you by phone about your credit card, ask the caller to provide his name, department, and extension, then hang up and call him back through the phone number listed on your credit card or billing statement.

I do not feel this goes nearly far enough:

- IN ADDITION, hang up, call Customer Service at your card company, and demand that your account be closed and replaced with a new account number.
- If they won’t close and replace, close the account immediately and permanently.

Why? This bogus call from “Security” occurred because the caller already knows your credit card number, but needs your security code to make many catalog or online purchases and ultimately to produce a bogus card for “physical world” purchases. Calling you is one way to get the code, but even if you don’t give it to them, they can get it by testing transactions at a colluding merhant randomly until they learn it (after all, there’s a 1 in 999 chance of being right).

I believe that nothing short of account number replacement is acceptable.

If your card company won’t do that, nothing short of account closure is acceptable. If you threaten to close, there’s a good chance that they’ll change their mind about card number replacement.